Table 8.3 Consider the Following Two Securities X and Y

question 132

Multiple Choice

Table 8.3
Consider the following two securities X and Y.
-Using the data from Table 8.3,what is the portfolio expected return if you invest 100 percent of your money in X,borrow an amount equal to half of your own investment at the risk-free rate and invest your borrowings in asset X?

• A)18.75%
• B)22.50%
• C)12.50%
• D)16.25%

---

Definitions:

General Partner

An owner of a partnership who has unlimited liability and is active in managing the firm, as opposed to a limited partner with limited liability.

Secondary Market

The market where investors buy and sell securities they already own, as opposed to the primary market where securities are first issued.

Foreign Exchange Market

A global marketplace for trading national currencies against one another.

Debt Market

A financial market where participants can issue and trade debt securities, often used by corporations and governments to finance their operations.